Hopes from those in the industry that prices of electric vehicles might continue to fall gradually might have to be put on hold, following significant price rises for lithium.
Figures published by Bloomberg indicate that the price of lithium has exploded by 500% in the last 12 months.
Lithium is an integral material in the production of electric vehicles, namely featuring in batteries. It is produced via pumping brine or mining practices.
It’s also hoped that the demand for lithium will eventually drop, with the industry hoping to one day be able to source the material from batteries of EVs that have reached their end-of-life phase.
In the supporting report, the increase in price is linked to prices plummeting between 2018 and 2020. This subsequently triggered a slump in investment on new lithium sources.
Experts cited by the report say that the lithium price situation could see EVs going up in price by US$1000 on average.
A recent boom in interest in electric vehicles has made lithium even more scarce, ultimately resulting in current pricing.
“There is plenty of lithium in the ground, but timely investment is the issue,” Joe Lowry, founder of advisory firm Global Lithium, told Bloomberg.
“Tesla can build a GigaFactory in about two years, cathode plants can be built in less time, but it can take up to 10 years to build a greenfield lithium brine project.”
Tesla chief executive Elon Musk weighed in on the topic last month, stating that the price of lithium had risen to “insane levels”.
“Tesla might actually have to get into the mining and refining directly at scale, unless costs improve,” the CEO said on Twitter.
“There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”
Musk made these comments amid global price increases for numerous Tesla products, rolled out around the world in April. The price increases were attributed to the increased cost of materials, as well as global inflation.
